How to correctly suspend or fire an employee with an H1B visa

Do notify the USCIS if the H1B employee is terminated

The C.F.R. requires that if the employer terminates the H1B employee for refusal to perform work assignments, the employer must notify the USCIS. If it is a bona fide dismissal, the employer is liable for the reasonable costs of return transportation of the H1B worker to his or her last place of foreign residence. Failure to satisfy these requirements means that the employment relationship has not been terminated and the employer will be liable for payment of salary.

Do notify the USCIS if the H1B employee voluntarily terminates employment

The employer is required to notify USCIS of this change in employment, and will not be responsible for back wages, nor will the employer be responsible for the costs of return transportation of the worker to his or her last place of foreign residence.

Do continue to pay the H1B employee if nonproductive status is due to a decision by the employer

If a non-productive status is caused by a suspension or lay-off by the employer, the employer is still required to pay the H1B employee the full pro-rata amount of salary due for a full-time week at the required wage set forth in the LCA during that period.

Do consult an attorney—especially in a complicated situation

If the employer faces a situation with an H1B employee that will result in suspension or termination of employment, but includes other complications that must be addressed, it is in the employer’s best interest to consult an employment law and/or immigration law attorney. For example, the H1B employee may have negatively impacted business operations, company security, financial integrity, another employee, etc. If the situation is not cut-and-dry, it is best to have legal counsel with an attorney who specializes in H1B legal matters, so as to mitigate any damage to the company and employees, and guide the termination or suspension in an appropriate and legal manner.

Do not pay wages to an H1B employee who voluntarily requests a leave of absence unrelated to employment

The employer is not required to pay an H1B employee for a period of nonproductive status due to conditions unrelated to employment, which take the employee away from his or her duties at his or her voluntary request and convenience, or circumstances that render the employee temporarily unable to work. If, however, the H1B employee is covered under the employer’s benefit plan or other statutes such as Family Medical Leave Act (FMLA) or Americans with Disabilities Act, wages must be paid.

Do not reduce wages if the H1B employee terminates the employment contract early

The employer is not permitted to deduct from or reduce payment of required wages as a penalty. The employer may, however, deduct bona fide liquidated damages from the required wage. The distinction between liquidated damages and a penalty is made on the basis of applicable state law. In general, the laws of various states recognize that liquidated damages are amounts fixed or stipulated by the parties at the inception of the contract, which are reasonable approximations or estimates of the anticipated or actual damage caused to one party by the other party’s breach of contract.

Do not forget to inform the employee of the process and next steps

In the event that an employer terminates an H1B employee, thorough and documented communication with the employee is necessary. If the employer is liable for the costs of the employee’s return home, the employer must not forget to explain or brush over the process with the employee. H1B employees have rights that must be upheld. In the event the employer’s emotions may negatively impact this process, hiring legal counsel to go over any necessary paperwork, communication, and final steps with the H1B employee may be worth the cost in order to maintain legal integrity while closing the employment relationship.